Hammond had to confront awkward Brexit facts today—and woe betide the government figure who does that

For the hard core on the backbenches, the price of Brexit is not something to parade in public

Hammond delivers his Budget today—MPs watch on. Photo: PA/PA Wire/PA Images It’s a treacherous time for Philip Hammond, for the prime minister and for the entire government. A great show is currently being put on in British politics. A phoney war endures. Britain is standing up to the European Union in its Brexit negotiations and the whole artifice of this government is founded on the notion that it can achieve some sort of Entente Cordiale 2.0 with Michel Barnier. Woe betide the senior government figure who stands up and starts dishing out awkward facts about the strains Brexit is placing on the government’s coffers. That’s just what the Chancellor did today. On p3 of his speech, he hot-footed it right into very dangerous territory, getting to the point so quickly that the Commons, barely warned up, might have missed it. “We have already invested almost £700m in Brexit preparations,” he told the House, “and today I am setting aside over the next two years another £3bn.” For the Brexit hard core on his back benches, the price of Brexit is not something to parade in public. The whole thing is meant to be about gains, not losses and certainly not expenditure. Government MPs looked unimpressed at this. That already gives a total of £3.7bn, to be spent in the coming two years simply to prepare Britain for Brexit—it has nothing to do with the “Divorce Bill” which will come on top of all this. And Hammond went on to say that he stands “ready to allocate further sums if and when needed.” This, then, is the cost of government business, of shipping David Davis to Brussels for his successive rounds of negotiations with Barnier, and to keep Liam Fox behind a desk somewhere. It’s a sharp reminder that Brexit’s chief effect so far, aside from the devaluation of the pound, has been a rapid expansion in the size of the government. That sort of thing used to be antithetical to most Conservatives. A good many of them seem more comfortable with it nowadays. “Economic growth in 2016 was 1.8 per cent. It will be 1.5 per cent in 2017, falling to 1.4 per cent the year after” And then came the growth figures. The Office for Budget Responsibility has revised them all downwards, blaming this on “uncertainty surrounding Brexit continuing to weigh on business investment.” This in turn has put downward pressure on productivity. Economic growth in 2016 was 1.8 per cent. It will be 1.5 per cent in 2017, falling to 1.4 per cent the year after, then to a low of 1.3 per cent, before picking up slightly. As Diane Coyle explained in our most recent issue, weak productivity growth is dragging the economy back. Paul Johnson, Director of the IFS, tweeted “Economy now forecast to be £65bn smaller in 2020 than the forecast in the March 2016 Budget. Lack of productivity growth a huge problem.” It’s a grim picture, especially when you contrast it with the outlook for other large European economies. The IMF outlook is for our growth to lag behind France, Germany and Spain—a fact that is at odds with the idea that Britain is escaping a sinking EU. Quite the opposite, in fact. Mood music is horribly important in politics, and the gloom surrounding the government is unmistakable. The Chancellor came out with some optimistic sounding ideas, such as his £500m for “a range of initiatives from Artificial Intelligence, to 5G and full fibre broadband.” But then that’s barely a seventh of what he set aside to pay for the process of Brexit. You can see why he went for a big, attention-grabbing tax cut to stamp duty for first time buyers. But there can be no getting away from it. Brexit is already starting to bite. We are already paying for it. We have only just begun. At least the Chancellor has the decency to make that much clear.

YOU’VE HIT THE LIMIT

You have now reached your limit of 3 free articles in the last 30 days. But don’t worry! You can get another 7 articles absolutely free, simply by entering your email address in the box below.

When you register we’ll also send you a free e-book—Writing with punch—which includes some of the finest writing from our archive of 22 years. And we’ll also send you a weekly newsletter with the best new ideas in politics and philosophy of culture, which you can of course unsubscribe from at any time

Email

Prospect may process your personal information for our legitimate business purposes, to provide you with our newsletter, subscription offers and other relevant information.

Click to learn more about these interests and how we use your data. You will be able to object to this processing on the next page and in all our communications.

Comments

JimmyMack

November 25, 2017 at 10:59

Be straight, Jay. You want the decision we took to leave the EU to be expensive. You want the French and Germans and the EU bureaucracy to wring a fortune out of us. You want us to be unsuccessful in our trade deals with the rest of the world and you want the UK economy to slide. This is the price you and others at Prospect want to see us pay for having the audacity to vote to leave.

Guenter H.

November 25, 2017 at 18:39

But it cannot be anything else than expensive. You cannot just do away with the numerous collaborative efforts which have grown between the Eu and the UK without building a new UK equivalent (drugs agency, customs system, flight coordination (all deals with 3d countries done by Brussels), agricultural im-and exports, perhaps a new UK-only industrial standard, new patent law, farming subsidies, fisheries rights and controls, access to and coop with EU universities, financial circuits, circulation of car parts for the car assembly industry, ...). There are countless ties which have to be cut and new instances created in their stead. And you just cannot walk away without an agreement, because Britain's international standing would suffer immensely, as a state in which you cannot place much confidence, breaking simply off a binding international treaty when it no longer suits, incapable of reaching a negociated agreement. Not exactly the ideal partner to conclude a treaty with...

Wouter R.

November 26, 2017 at 19:06

Is Jimmy Mack finally getting desperate?

Prospect's free newsletter

The big ideas that are shaping our world—straight to your inbox. PLUS a free e-book and 7 articles of your choosing on the Prospect website.

Prospect may process your personal information for our legitimate business purposes, to provide you with our newsletter, subscription offers and other relevant information. Click here to learn more about these purposes and how we use your data. You will be able to opt-out of further contact on the next page and in all our communications.

This Month's Magazine

How has the national broadcaster dealt with the biggest issue of our time? Plus: James Graham on John Bercow and Jennifer Williams on Manchester's housing boom (and homelessness crisis)

Register today and access any 7 articles on the Prospect’s website for FREE in the next 30 days.. PLUS find out about the big ideas that will shape our world—with Prospect’s FREE newsletter sent to your inbox. We'll even send you our e-book—Writing with punch—with some of the finest writing from the Prospect archive, at no extra cost!

Prospect subscribers have full access to all the great content on our website, including our entire archive.

If you do not know your login details, simply close this pop-up and click 'Login' on the black bar at the top of the screen, then click 'Forgotten password?', enter your email address and press 'Submit'. Your password will then be emailed to you.

Thank you for your support of Prospect and we hope that you enjoy everything the site has to offer.

This site uses cookies to improve the user experience. By using this site, you agree that we can set and use these cookies. For more details on the cookies we use and how to manage them, see our Privacy and Cookie Policy.